The Department of Agriculture, Land Reform and Rural Development (DALRRD), agribusinesses and various social partners have been hard at work for months crafting the agricultural and agro-processing master plan, as well as separately blended finance instruments. These parties aim to ignite growth and expansion in South Africa’s agricultural sector as part of the government’s broader economic reconstruction and recovery plan.
Both these initiatives are set to be launched in the coming months, while the first phase of the blended finance instrument has already started. This is evidenced by the launch of the joint Agri-Industrial Fund of R1 billion by the Industrial Development Corporation (IDC), in partnership with the DALRRD.
These are constructive programmes with the potential to ignite growth and transformation in the sector. As such, industry bodies such as Agbiz allocate most of their time and resources to pursue these goals. Sadly, much of this good work takes place behind the scenes, while other significant policy developments that might deter the progress grab social partners’ and the media’s attention.
A case in point is the renewed debate about section 25 of the Constitution and the Expropriation Bill. Last week, the portfolio committee on public works hosted public hearings on the Expropriation Bill, while the committee tasked with “making explicit what is implicit” in section 25 of the Constitution, continued with their public hearings. The outcome will have implications on public sentiment.
We hope that it will not detract from the two initiatives above to drive growth and expansion in South Africa’s agriculture. The success of any of these programmes depends on the private sector and other social partners jointly implementing the government’s proposals.
As such, policy actions that might be perceived as unaligned with the broader stakeholders’ interests present a risk and could lead to a lack of participation. It could therefore stall the master plan and blended finance implementation.
Admittedly, the discussion of the potential amendment to section 25 of the Constitution has gone beyond the realm of agriculture, as various stakeholders are engaged in the national debate led by parliament. Yet, its outcomes will likely have direct implications on the success of the DALRRD’s work programme. Hence, it is prudent that parliament decides on the section 25 matter, while being mindful of the broader impact on the agricultural as well as other sectors of the economy when South Africa is at an economic reconstruction phase.
Amendment of Constitution is unnecessary
We have long argued at Agbiz that land reform is an important policy imperative, and we are in full support of it. Yet, we do not believe that an amendment to the Constitution will lead to the country’s desired outcome of prosperity. Likewise, parliament must finalise the Expropriation Bill.
It provides the procedural guarantees required to bring the government and an expropriated owner or bondholder on an equal footing if expropriation occurs. Unlike the section 25 amendment, Agbiz is broadly supportive of the need for legislation to regulate expropriation, but opposes the provisions relating to ‘nil’ compensation.
Expropriation should always be used as a last resort and cannot substitute well-formulated and well-implemented programmes to effect transformation in the sector. There are various private-public partnerships (p-p-p) for land reform, some of which were highlighted in the Presidential Advisory Panel on Land Reform and Agriculture, as well as chapter six of the National Development Plan, which the government could utilise to accelerate land reform.
The ongoing master plan is designed in the spirit of the joint venture or p-p-p. A continuation of this approach to policy implementation would potentially yield positive results for expansion in agricultural production and, after that, job creation in the sector.
In sum, there is currently some level of unity in agriculture and agribusiness, and all stakeholders are working towards ensuring the success of the master plan implementation, anchored by blended finance and various regulatory support that DALRRD and multiple departments such as water affairs and the Department of Trade, Industry and Competition would provide. However, the approach that will be taken in parliament in as far as the discussions of section 25 of the Constitution can sway the stakeholders’ minds off these necessary economic reconstruction plans. – Wandile Sihlobo, Agbiz